The USD/CHF pair remained relatively stable after some modest increases the previous day, hovering around 0.7870 during Asian trading on Tuesday. Currency values seem to have calmed, with the US dollar maintaining strength due to a higher demand for safe-haven assets, particularly following reports from Tasnim that suggest Iran has stopped its indirect talks with the United States. Investors are now looking forward to the Swiss trade balance data expected later today.
The report indicated that Iran and its allies in the “Resistance Front,” including groups in Yemen, Lebanon, and Iraq, have formulated strategies to impose a complete blockade on the crucial Strait of Hormuz while also opening new fronts, including in the Bab el-Mandeb Strait, as a way to retaliate against Israel and its supporters.
This situation intensified last week when an Axios report on X mentioned that Iran has placed additional mines in the strait. Such developments have created significant hurdles to a swift resolution of the ongoing crisis, which has already effectively sealed off the Strait of Hormuz—a vital passage for global oil and LNG supplies.
The rising tensions in the Middle East continue to spark worries about global inflation and have led to expectations that the Federal Reserve might increase interest rates. Financial markets are currently pricing in a 39% likelihood of a quarter-point rate hike by December 2023, as shown by CME’s FedWatch tool, reflecting persistent inflationary pressures.
On Monday, fresh economic data from Switzerland painted a somewhat mixed yet mostly positive picture of the country’s fiscal health. In the first quarter, Switzerland’s GDP grew by 0.4% compared to the previous quarter, slightly missing market forecasts of a 0.5% increase.
Despite this minor setback in GDP growth, consumer and industrial activities displayed impressive resilience. Retail sales in Switzerland saw a notable year-on-year rise of 1.6% in April 2026, far surpassing market expectations of a mere 0.2% increase, which had already been revised from the previous month’s 1% rise.
This upbeat momentum was further supported by robust growth in the industrial sector, where the procure.ch-UBS Manufacturing PMI surged from 54.5 in April to 57.3 in May 2026, far exceeding market predictions of 54 and marking the highest point of manufacturing growth since July 2022.
